It has become very popular for politicians to bash ratings agencies of late, as some AAA-rated countries begin to see their ratings put under the spotlight.
The latest announcement comes from the European Parliament’s economic and monetary affairs committee, which has called for the dominance of the so-called “Big Three” – Moody’s, Fitch and Standard & Poor’s – to end.
Earlier this week, UK parliamentarians also announced they would be opening an inquiry into the role rating agencies play.
Increased scrutiny comes after French central bank governor Christian Noyer blamed rating agencies for undermining positive sentiment from the recent European summit, calling them “frankly incomprehensible and irrational”.
There are some genuine concerns shared by European politicans and bureaucrats.
Indeed, the “AAA” status of the European Financial Stability Facility (EFSF) bailout fund remains in question as agencies continue to query France’s credit worthiness.
The UK is not immune from the whims of the agencies either, having been warned that its own AAA-rating remains under scrutiny.
Of course, we mustn’t forget the role rating agencies played in the credit crisis of 2008. The ratings awarded to a number of asset-backed securities were questionable, to say the least.
However, now agencies are taking a much harder line with sovereign ratings it appears they are drawing more attention of the law-makers.
Some of the decisions may be difficult to understand, particularly when comparing similarly rated countries: it’s certainly something that agencies will have to become more transparent about.
European authorities have already started to examine the rating agency sector and are hoping investors will rely on them less when making investment decisions.
In Brussels, European policymakers are hoping to break up the dominance of the Big Three, which currently claim a 95% share of the market.
But as European governments – and particularly eurozone members – struggle to get on top of debts, the rating agencies will remain an easy target.